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Don't Worry; Be Happy By Stephen J. Butler

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A nation of investors, psychologically bludgeoned by the numbers on their September 30th account statements, would do well to recall the song by Bobby McFerrin entitled, "Don't Worry; Be Happy." Apart from being a popular song in 1988, as well as an unofficial theme song for the original George Bush campaign, the song offers a useful message at times like these.

"In every life we have some trouble But when you worry you make it double."

To the extent we are bothered by our investment results, it may be helpful to take a few chapters from the book of neuroscience. This is the relatively new study of the brain which holds that we do not begin as a blank sheet of paper waiting to be impacted by environment. We are, instead, like a film where the picture has already been taken, and we are waiting to be developed. Even our sense of morality is dictated by generations of genetic imprinting. The brain itself, a chemical analogue computer, can be mapped and our pre-programmed "software" can be determined. In recent years, conventions of neuroscientists have attracted over 20,000 participants which puts them in the ranks of the largest professional gatherings. By now. you're probably asking, "Where have I been? What am I pre-programmed to do from here on out?"

Studies based on neuroscience indicate that individuals experience a given level of happiness regardless of what is going on in their personal or financial lives. Of course, any one person experiences periodic bouts of pleasure or sadness but they return to equilibrium at some level that is pre-programmed. And different people wind up at different natural levels of equilibrium. How does this all relate to the disappointment triggered by the market crash?

If you are really upset, it could be that you were pre-programmed to be generally unhappy anyway. If you are taking it in stride and don't feel too bothered or consumed by your 30% loss, you may be someone who is conditioned to always be walking "on the sunny side of the street." The danger lies at the two opposing ends of the spectrum. Someone who is too happy and optimistic may make bad financial decisions that fail to provide enough cushion against the down side. Someone who is perpetually unhappy for reasons they have not fully explored may allow the recent market declines to plunge them into a catatonic state.

In either case, the best course of action is to wait. The advice generally given to a surviving spouse after the death of a husband or wife is to not make any big decisions for awhile. Don't sell the house right away, etc. The plunge of the stock market and the attack on the World Trade Center should prompt us to consider the same advice. A long article in the New York Times last Sunday interviewed a blue ribbon slate of leading financial figures, and there was no consensus among them as to when the economy or the stock market would turn around.

The best antidote to the threat of making rash decisions and costly mistakes may be to use this opportunity to forget about money and investing for awhile. A dinner partner at a wedding over the weekend said that she had found herself eating and drinking more in the weeks since the attack. (Let's get a grip.) She also said that she found herself reassessing and focusing on what was really important in her life. There's a message here for all of us.

It is important to keep saving and investing. It is also important to consider how we are spending our time and money. Do we really need that next purchase, whatever it might be? Would the money be better spent paying off some credit card or mortgage debt?

And what about our health? Yoga was invented about 4,000 years ago to help Hindus extend the last third of their lives, which they devoted to spiritual awakening. Still in print today, after thirty years and millions of copies sold, is a book by Jesse Stern called "Yoga, Youth and Reincarnation." This is an excellent time to read this inspirational book that may help preserve our health and help us last long enough to far outlive this economic downturn.

Frustrated by a lack of understanding about these people in the Middle East that are causing us all this anguish? One of the best books on the subject is "From Beirut to Jerusalem" by Thomas Friedman. It reads like a novel, but it's a true story of his life over the years as a New York Times correspondent in the Middle East. Most important, it aids in understanding how people of the Arab world think. A retired Bechtel engineer told me years ago that "west of the Bosporus it's a different world." We are certainly finding that out now. Anytime we can gain understanding, however, it helps to reduce our fear and anxiety. This book is a tonic in that respect.

All in all, there isn't much we can do about events unfolding in the political and financial world. By any measure, they represent a disaster. When 70% of our success as investors is a function of what the market as a whole is doing, we are definitely paddling upstream if we expect to be putting up investment gains in the face of this downturn. Our best bet is to avoid doing anything rash and to use these events as a catalyst for change. This may be the time to fold our tents as self-styled investment experts and focus on improving other aspects of our lives, like our health and our relationships.

"cause when you worry your face will frown and that will bring everybody down Don't Worry - Be Happy..."